The Effect of Employee Engagement on the Effectiveness of Business-Nonprofit Alliances: A Qualitative Analysis

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1 The Effect of Employee Engagement on the Effectiveness of Business-Nonprofit Alliances: A Qualitative Analysis Hamid Abbassi, Department of Marketing, Old Dominion University, Norfolk, VA 23529, sabbassi@odu.edu ABSTRACT This research seeks to examine how engaging a business organization s employees, as prospective donors, in the charitable activities of a nonprofit organization can influence the effectiveness of the business-nonprofit alliance. Using grounded theory, it is argued that in addition to the models of business buying behavior, the effectiveness of business-nonprofit collaborations can be explained and predicted by the increased contributions of the business organization s employees due to favorable motivational states. Based on a case analysis of the Operation Smile-Johnson and Johnson collaboration, this research highlights how the principles of donor-charity relationship building can result in desirable attitudes and behaviors of one ally s employees in regard to the strength and performance metrics of the alliance. Within 11 interviews with marketing managers of Operation Smile, an international medical charity established to provide free cleft lip and cleft palate surgery to children living in resource poor environments, the process of engaging Johnson and Johnson s employees in charitable activities of Operation Smile is outlined. Findings suggest that engaging employees functions as a lever for direct performance outcomes of the nonprofit, for example through increased volunteer contributions in the form of medical missions. In addition, not only does it serve as a pivotal tool in creating and nourishing emotional bonds with a charity cause, engaging employees also contributes to the business-nonprofit relationship. Consistent with previous research, engaged

2 individual agents can play a major role in inter-organizational alliances. The themes emerged in the interviews indicate that the effect of mere participation of business employees in a goaloriented charity creates a sense of belonging and loyalty to both the cause and the charity organization. This loyalty can have carry-over effects at the organizational level. Furthermore, enhanced corporate-level communication between the two organizations is proposed as a mediator of the improvement in the business-nonprofit collaboration.

3 How to move services from free to fee without jeopardizing the customer relationship: The role of pricing schemes, service level and communication strategies. Marcella Grohmann (presenting author) 1 Marcus Zimmer 1 Florian von Wangenheim 1 Wolfgang Ulaga 2 1 Department of Management, Technology & Economics, ETH Zürich 2 Center for Services Leadership, Arizona State University Over the past decades, manufacturing companies have been enriching their product portfolio through the addition of value-added service, which they often give away for free. In order to capture additional revenues and to stop services from being a pure cost driver, scholars and practitioners have recommended a transition of services from free to fee. However, customers have been conditioned to getting these services for free and thus it may pose a problem when free services are suddenly charged. Our online experiment with 347 customers of a large tool manufacturer shows that customers respond with negative perceptions and behavioral intentions when manufacturers start billing their services. Although we find that customers willingness-to-pay for individual services at a pay-per-use pricing scheme is 48 % higher than for a packaged version, the choice of this specific pricing scheme cannot fully mitigate customers disadvantageous reactions. We also investigate the effect of enhancing the presented service level on customers evaluations of the service offering and find that when moving services from free to fee, customers evaluate an enhanced service level not better than the one they are used to. Results also indicate that customers who are accustomed to paying a fee for productrelated services show similar evaluations of the service offering as in a condition where

4 services are free. In this context, our next goal is to understand how to overcome the from free to fee hurdle to attenuate customers detrimental assessments of the service offering. Hence, we are currently working on a second online experiment to examine whether specific communication strategies exist that help shifting customers reference point away from a zero price and therefore facilitate a transition from free to fee. Results are expected to be available by the end of April and can thus be presented at this conference.

5 The Role of Fairness in Contract Negotiation and Contract Implementation and its Influence on Business-to-Business Relationships Tobias Grossmann & Michael Kleinaltenkamp Marketing Department, Freie Universität Berlin, Germany Abstract On business markets most transactions are the result of negotiations between buying and selling firms. In this regard, when studying long-term B2B relationships, traditionally the focus has been merely on the very purchasing and selling decisions which typically take place in negotiations between both partners. However, this perspective ignores that the negotiating and signing of a contract is followed by its often long-lasting implementation with possible future rebuying and reselling efforts. In addition, although researchers have acknowledged that fairness is an important element in many B2B transactions, studies have not differentiated between effects and influential relationships of fairness perceptions during the preceded negotiation phase and the subsequent implementation phase of a contract completion. Looking at B2B relationships, we hence propose a dichotomy between the preceded contract negotiation phase and the subsequent contract implementation phase of a B2B transaction. Focusing on fairness as an important element in many B2B transactions, we develop a conceptual model that features the negotiation and the implementation phases of a negotiated contract with its fairness perceptions. Acknowledging the importance for on-going B2B relationships, relationship quality and future business intentions are also included in our considerations. To establish a better understanding about the linkages and influential effects of negotiation and implementation fairness perceptions, we conducted 29 in-depth interviews with negotiation and implementation experts from sales and purchasing functions. We suggest that fairness is not only an isolated important element in B2B negotiation and contract implementation, but that negotiation fairness often sets the stage for implementation activities and hence future behavioral intentions. Keywords: B2B relationships, contract negotiation fairness, contract implementation fairness